You are here: Home » International » News » Economy
Business Standard

UK govt to pay 80% of wages of workers to protect jobs affected by Covid-19

To all those at home right now, anxious about the days ahead, I say this: you will not face this alone, Rishi Sunak said

Press Trust of India  |  London 

Rishi Sunak
Rishi Sunak at Downing Street 10 in London, Britain. Photo: Reuters

To all the Britishers anxious about the days ahead, UK's Indian-origin finance minister said: you will not face this alone, as he unveiled an unprecedented multi-billion pound package aimed at protecting people's jobs through pandemic which is crippling the global

The Chancellor of the Exchequer once again took centre-stage in UK's COVID-19 fightback and struck a note of compassion as he joined British Prime Minister at Downing Street on Friday evening to announce that the government would step in to cover 80 per cent of the of those unable to work, so that companies do not have to resort to redundancies. 

The payments will be worth up to a maximum of 2,500 pounds per month, just above the median income. Coming just days after a 350 billion pounds bailout package for companies, many believe this is unprecedented as the new proposal may cost an extra 78 billion pounds.

Now, more than any time in our recent history, we will be judged by our capacity for compassion. Our ability to come through this won't just be down to what government or business can do, but by the individual acts of kindness we show one another, said Sunak, the son-in-law of Infosys co-founder Narayana Murthy, who has become the face of the UK's economic fightback during the outbreak which has claimed 177 lives in the country.

To all those at home right now, anxious about the days ahead, I say this: you will not face this alone, he said.

 

For the first time in our history, the government is going to step in and help to pay people's We're setting up a new Job Retention Scheme, he said, just days after he unveiled a massive 350-billion pound rescue package for Britain's struggling businesses.

As part of Sunak's unprecedented measures, for unprecedented times, any employer in the UK small or large, charitable or non-profit will be eligible for the scheme.

They will be able to contact the tax department, HMRC, for a grant to cover most of the of people who are not working but are furloughed and kept on payroll, rather than being laid off.

And under the scheme, government grants will cover 80 per cent of the salary of retained up to a total of 2,500 pounds a month, which is above the UK's median income.

And, of course, employers can top up salaries further if they choose to. That means in any part of the UK can retain their job, even if their employer cannot afford to pay them, and be paid at least 80 per cent of their salary, explained Sunak.

The job retention scheme will cover the cost of wages backdated to March 1 and will be open initially for at least three months, to be extended scheme for longer if required. Crucially, the minister said he was not placing any limit on the amount of funding available for the scheme.

 

We will pay grants to support as many jobs as necessary. We said we would stand together with the British people and we meant it, he said.

 

The 39-year-old, who had presented his very first Budget just earlier this month, has had to come back with two additional mini-budgets just days apart as he unleashed a string of other measures, including VAT and tax waivers and easier access to credit.

He also announced that the Business Interruption Loan Scheme will be interest free for 12 months, up from an initial timeline set for six months.

He concluded his latest set of economic boosters with a direct plea for greater kindness and support, amid ongoing reports of panic buying and supermarket shelves stripped and depriving frontline medical staff battling the disease being left without essentials at the end of their long hospital shifts.

When this is over, and it will be over, we want to look back at this moment and remember the many small acts of kindness done by us and to us, Sunak said.

We want to look back on this time and remember how, in the face of a generation-defining moment, we undertook a collective national effort and we stood together, he said.

The coronavirus death toll has gone up to 11,397 with more than 275,427 cases reported in over 160 countries and territories, according to data from Johns Hopkins University.

First Published: Sat, March 21 2020. 17:15 IST
RECOMMENDED FOR YOU